Xiaomi plans to go public

Sunday, 21 January 2018 13:27

Active Telecoms

Chinese electronics and software company Xiaomi has reportedly signed on bankers to support an expected initial public offering (IPO) which could value the company at $100 billion, Bloomberg said. Goldman Sachs and Morgan Stanely have been selected by Xiaomi, with Credit Suisse and Deutsche Bank playing a role, the report speculates.

Xiaomi experienced a weak 2016 only to return to much stronger growth in 2017. Therefore, there is significant interest in the company going public. According to reports, the Chinese company is set to smash its annual target, with strong profitability. Xiaomi’s value was proposed at $50 billion in earlier reports, but now it’s being valued at $100 billion.

Xiaomi still faces challenges, however, despite its strong growth. The company will need to enter new additional markets if its smartphone segment is to keep growing, because competition in its home country of China is heavy. Xiaomi has succeeded in establishing itself in markets like India, but expanding further will not be an easy process for the company.

Working with partners and building a strong hardware ecosystem resulted in Xiaomi’s Mi smartphone brand gaining strength in the consumer space, the Bloomberg report said. It adds that Xiaomi’s strength in software has set it apart from other Chinese vendors.